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Block #9

Mining

Proof-of-work versus proof-of-stake

Both answer the same question: who may write the next block, and why should everyone accept it? The difference is what you put at risk.

Fleur de WitWritten by Redacteur banken, RotterdamUpdated Checked by the editorial desk

Costs outside versus inside the system

Proof-of-work anchors security outside the system: energy and machines must be bought in the real world.

Proof-of-stake anchors security inside the system: you post coins that can be slashed. An attacker must buy a large share of supply and damages their own stake.

Finality and recovery

Proof-of-work has probabilistic finality; proof-of-stake networks often provide explicit finality within a few blocks.

Recovery differs too: PoW simply continues once the attacker stops paying, while PoS communities can destroy the attacker's stake.

  • PoW: physical cost, permissionless entry
  • PoS: economic cost, faster finality
  • Neither protects against bad user decisions

Centralisation pressure

Mining centralises towards cheap energy and large pools; staking towards large custodians and liquid staking protocols.

Judge a network by the actual distribution of hashrate or stake, not by the mechanism alone.

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Frequently asked questions

Is proof-of-stake safer?

Different, not automatically safer. It buys speed and efficiency but leans on broad coin distribution.

Why did Ethereum switch?

Mainly to cut energy use by more than 99% and to enable staking-based scaling.

Could bitcoin switch too?

Technically imaginable, practically not: it would touch the core of bitcoin's value proposition.

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